DSE cracks down on 13 more low-profile cos

A file photo shows the Dhaka Stock Exchange building in Dhaka. The DSE has decided to take punitive measures against 13 more non-compliant and non-performing companies after delisting two such firms last month to bring discipline in the capital market. — New Age photo

The Dhaka Stock Exchange has decided to take punitive measures against 13 more non-compliant and non-performing companies after delisting two such firms last month to bring discipline in the capital market.The DSE on Tuesday sent letters to the 13 companies asking them to inform the bourse about their current business position and whether they have any business plan to revive their companies. The companies will have to reply to the bourse’s letter immediately.The decision came at a board meeting of the DSE on Monday.Earlier, on July 18, the DSE delisted Rahima Food Limited and Modern Dying and Screen Printing Limited as the share prices of the companies had continued surging abnormally despite the companies remaining out of operation for long.According to the DSE web site, performance of the 13 listed securities will be reviewed by the DSE in line with listing regulations as the issuers have failed to declare dividends for a period of five years from the date of declaration of last dividend or the date of listing with the exchange.The companies are Meghna Pet Industries, ICB Islamic Bank, Dulamia Cotton Spinning Mills, Samata Leather Complex, Shyampur Sugar Mills, Zeal Bangla Sugar Mills, Imam Button Industries, Meghna Condensed Milk Industries, Kay & Que (Bangladesh), Savar Refractories, Beximco Synthetics, Jute Spinners and Shinepukur Ceramics.DSE officials said that there were 17 more dud companies under the DSE scanner, which were not complying with the listing and securities laws for years.According to the DSE listing regulations, any listed securities may be delisted if the issuer has failed to declare dividend for a period of five consecutive years and if the issuer has failed to hold its annual general meeting for three consecutive years.After the news regarding the 13 companies was disseminated on the DSE web site, the share prices of all the 13 companies faced heavy selling pressure from investors. The share prices of more than two-third of ‘Z’ category companies slumped on Tuesday.DSE officials also said that the junk companies might face the same fate as Rahima Food and Modern Dying.DSE managing director KAM Majedur Rahman told New Age that the companies might require appearing in hearing to explain their position and the bourse might conduct visit to their factories and offices after receiving replies from the companies.He also said that the DSE decision would raise the alarm about the risks of investing in the capital market whimsically.‘Investors need to know about companies’ financial position before making investment decision,’ Majedur said.The DSE made the decision after seeing irrational hype surrounding the shares of the non-performing companies in recent day that turned the market into a risky place, he said.DSE shareholder-director Minhaz Mannan Emon said, ‘If the companies fail to give acceptable answers, the bourse would have no option but to delist them in accordance with the listing rules of the DSE.’The companies will be given chance to explain themselves and may be given time to fulfil securities rules, he said.The DSE has recently started cracking down on the dud companies amid huge criticisms about the role of the DSE and the Bangladesh Securities and Exchange Commission in dealing with the companies whose share prices often soar without any price sensitive information.